On Strengthening China’s Relations with Latin American and Caribbean Countries under New Situation

Zhang Kunsheng

At present, the world situation is complex and volatile, the impact of the international financial crisis continues to deepen,and the evolution of international political and economic landscape is accelerating. As an emerging force rising rapidly,Latin American and Caribbean countries continue to maintain peace, stability, development and unity, and participate in global affairs more proactively, thus becoming one of the regions with great dynamism in growth and potential in development.They are attaching greater importance to strengthening friendly exchanges and mutually beneficial cooperation with Asia-Pacific countries including China.

In June 2012, President Hu Jintao went to Los Cabos, Mexico to attend the G20 Summit, while Premier Wen Jiabao went to Brazil to attend the United Nations Conference on Sustainable Development and paid an official visit to Brazil, Uruguay,Argentina and Chile. They reached important consensus with leaders of Latin American and Caribbean countries on further developing China-Latin America and the Caribbean relations,promoting effectively strategic mutual trust and pragmatic cooperation between China and the region at multilateral and bilateral levels, thus laying a solid foundation for the comprehensive and in-depth development of China’s relations with this region. While we stand at a new historical starting point,facing new situation, new opportunities and new challenges, it is necessary to think how to further promote China-Latin America and the Caribbean relations, enhance mutual understanding,learn from each other, expand mutually beneficial cooperation and promote common development.

I.Why is Latin America and the Caribbean a vibrant emerging force?

First, the political and security environment is stable. The political system of Latin American and Caribbean countries has been consolidated. Pursuing stability, promoting reform and seeking development have become the mainstream policies of the region. Latin American and Caribbean countries generally pursue peaceful foreign policy, with few intra-regional territorial disputes and ethnic conflicts. The overall political and security situation is expected to remain stable for a long period of time.

Second, the natural endowments are superior. The total area of Latin America and the Caribbean is 20.7 million square kilometers, accounting for 13.8% of the world’s total, whereas its population accounts for 8.6% of the world’s total. It is rich in strategic resources such as oil and gas, mineral resources,water and agricultural, husbandry and fishery resources. Its forest and grassland account for 24% and 15% of the world’s total respectively, its freshwater resources account for over 15%of the world’s total, and it is rich in biodiversity resources. The unique natural conditions have given Latin America and the Caribbean relatively strong bearing capacity in resources and environment and a solid foundation for development.

Third, its capability of self-development is improving. Having seriously drawn the historical lessons on development, Latin American and Caribbean countries adopted sound economic and financial policies and implemented energetically the diversification strategy in foreign economic and trade cooperation,thus successfully handling the impact of the international financial crisis and promoting sustained and rapid economic growth. In the first decade of the new century, Latin America and the Caribbean saw an accumulated growth in GDP by 38.5%,reaching US$ 5.6 trillion by 2011, with per capita GDP exceeding US$ 8,500. Brazil has taken the place of Britain as the sixth largest economy of the world. At present, by intensifying the adjustment of economic structures, accelerating the formulation of medium- and long-term development strategies, increasing investment in infrastructure construction and technological innovation, the capability of self-development of Latin American and Caribbean countries is further improving. According to authoritative institutions such as the UN Economic Commission for Latin America and the Caribbean, the region has good economic fundamentals and if no sudden change in international economic and financial situation occurs, it is expected to maintain a 3-4% growth rate in the next two years, thus further playing an important role in promoting world economic growth and gaining more weight in the global economic landscape.

Fourth, the people’s livelihood continues to improve.Governments of Latin American and Caribbean countries pursue“inclusive growth”by actively implementing poverty alleviation and poverty reduction programs, and substantially increasing spending in social areas. They have achieved remarkable results: from 2003-2010, the poverty rate in Latin America and the Caribbean fell from 44% to 32.1%, the extreme poverty rate fell from 19.4% to 12.9%, and the poor and extremely poor population fell respectively by 40 million and 25 million,with the regional average Gini coefficient down from 0.55 to 0.52. According to International Labor Organization statistics,the unemployment rate of urban population in Latin America and the Caribbean in 2011 fell to 6.7%, and the employment rate in formal sectors, average wage and minimum wage have increased every year.

Fifth, the self-development through unity is accelerating. At the end of 2011, the Community of Latin American and Caribbean States (CELAC) covering all countries in the region was formally established. It is another regional mechanism for overall cooperation among developing countries in seeking strength through unity following the Arab League, the African Union and ASEAN, which will play a positive role in both promoting Latin America and the Caribbean as a whole to participate in interregional cooperation and enhancing the overall strength of this region and developing countries. At the same time, sub-regional integration organizations such as MERCOSUR, UNASUR and ALBA are maintaining good momentum in development. In June 2012, Peru, Mexico, Colombia and Chile formally established the Latin American Pacific Alliance, accelerating the strategic pace of integration of Latin America and the Caribbean into Asia Pacific.

Sixth, the international influence grows significantly. Latin American and Caribbean countries are more eager to participate in the reform of the international system, and strive to play a greater role in international and regional affairs. While maintaining traditional relations with developed countries in North America and Europe, they are paying more attention to developing relations with such emerging countries as China, Russia, India and South Africa and other developing countries. Latin American and Caribbean countries have actively voiced their positions on global issues such as the reform of the UN, global economic governance,climate change and sustainable development, and the Iranian nuclear issue, Syria and other international and regional hot-spot issues to firmly safeguard the common interests of developing countries under multilateral frameworks like the UN, G20, and BRICS. In June 2012, Mexico and Brazil hosted the G20 Summit and the UN Conference on Sustainable Development respectively,further enhancing the international status and influence of Latin America and the Caribbean.

Of course, the development and rise of Latin American and Caribbean countries are filled with numerous challenges. Some countries are still exploring development paths suited to their own national conditions. All the countries are facing arduous tasks in economic structural adjustment, industrial upgrading and restructuring, and sustainable economic development.Some countries suffer from intensified partisan struggles and social conflicts, a widening gap between the rich and the poor,serious organized crimes and grim public order. Against the backdrop of the continued turmoil in international economy and finance, the region is encountering great external pressures and uncertainties in accomplishing sustained economic development. In some countries, trade protectionism is rising.Generally speaking, the Latin American and Caribbean region is in a developing and rising period. It is full of dynamism and expected to maintain long-term stability and development.It is playing a greater constructive role in coping with the international financial crisis, boosting global economic growth and promoting the establishment of a new international political and economic order.

II.How to view the relations between China and Latin American and Caribbean countries?

First, with the growing need for mutual reliance, the political foundation of the relations between China and Latin America and the Caribbean is getting increasingly solid. As the largest developing country and an important developing region, China and Latin America and the Caribbean are important parts of international emerging forces and are positive forces to promote a multi-polar world and the democratization of international relations. Facing complex and volatile global and regional situation, China and Latin America treat and strengthen mutual relations from a strategic perspective, and maintain high-level exchanges, therefore political mutual trust between them is deepening. Since 2003, Chinese President Hu Jintao, Chairman of the Standing Committee of the National People’s Congress Wu Bangguo, Premier of the State Council Wen Jiabao, Chairman of the National Committee of the Chinese People’s Political Consultative Conference Jia Qinglin and other Chinese leaders have visited Latin America and the Caribbean several times.Leaders of 21 countries having diplomatic relations with China have visited China. Additionally, leaders of both sides often meet on multilateral occasions such as the General Assembly of the UN, the G20 Summit, the APEC Leaders’Informal Meeting and the BRICS Leaders’Meeting. Through these highlevel exchanges, political mutual trust between China and Latin America and the Caribbean is further consolidated and strengthened, and the exchanges at all levels between the two sides are conducted vigorously, thus playing an important role in ushering in mutually beneficial cooperation in various fields.

The positioning of the relations between China and Latin American and Caribbean countries has been elevated constantly,and the dialogue and cooperation mechanism is improving. China has established a comprehensive strategic partnership with Brazil, strategic partnerships with Mexico, Argentina, Peru and Chile, and a strategic partnership for common development with Venezuela. China has established a mechanism of comprehensive strategic dialogue at the foreign minister level with Brazil and a mechanism of strategic dialogue at the vice foreign minister level with Mexico. China has built up bilateral high-level cooperative mechanisms with Venezuela,Mexico and Brazil, and political consultation mechanisms between foreign ministries with 21 countries in Latin America and the Caribbean which have diplomatic ties with China. China has signed a joint action plan and a ten-year cooperation plan with Brazil and formulated a joint action plan with Mexico, further strengthening the strategic planning and guidance on the development of bilateral relations.

With the transformation of the international system, China and Latin America and the Caribbean have found more strategic consensus and shared interests.

Both sides show mutual understanding and provide mutual support on issues concerning each other’s core and major interests. China supports Latin American and Caribbean countries in their efforts to explore development paths suited to their national conditions. China gives them firm support on major issues concerning national sovereignty and territorial integrity, fully accommodates the concerns of the Caribbean island nations over issues like climate change and calls on the international community to give them support. The governments of Latin American and Caribbean countries having diplomatic relations with China have given their consistent understanding and support to China on the issues of Taiwan, Tibet and Xinjiang, firmly supported China in holding the Beijing Olympic Games and the Paralympic Games, and actively participated in the Shanghai World Expo.

Both sides maintain close contacts and coordination on world affairs. With the transformation of the international system, China and Latin America and the Caribbean have found more strategic consensus and shared interests in areas such as global governance,international financial system reform, and the decision-making power of developing countries in international affairs. In the frameworks of international organizations and multilateral mechanisms such as the UN,WTO, APEC, G20, BRICS and BASIC, China and Latin America and the Caribbean are coordinating more closely, further enhancing the global influence and strategic significance of their cooperation.

Economic and trade cooperation is the most vibrant and promising field in developing relations between the two sides.

The trend of the overall cooperation between China and Latin America and the Caribbean is gaining momentum. China has always supported the integration and unity of Latin America and the Caribbean, actively developing relations with regional organizations in Latin America and the Caribbean. It has established consultation mechanisms with the Rio Group,MERCOSUR and the Andean Community, and set up a regular foreign ministers’dialogue mechanism with the CELAC Troika.It is proposing to establish a China-Latin America and the Caribbean cooperation forum, and actively exploring to hold a China-Latin America and the Caribbean leaders’meeting at an appropriate time. The Chinese side is also exploring to establish relations with the integrated organizations in Latin America and the Caribbean such as UNASUR and the Pacific Alliance of Latin America. The move is responded positively by the countries in this region.

Second, the convergence of interests between the two sides is deepening with the sustained economic development of China and Latin America and the Caribbean. Since China and Latin America and the Caribbean are facing the tasks of developing economy and improving people’s livelihood, economic and trade cooperation is the most vibrant and promising field in developing relations between the two sides. With the increasingly strong complementarity of economy and trade between China and Latin America and the Caribbean, their pragmatic cooperation has entered a new stage. Particularly, in coping with the international financial crisis, China and Latin America and the Caribbean have adopted proper measures. In general, the economies of China and Latin America and the Caribbean have maintained stable and rapid growth, thus becoming important engines driving the recovery of the world economy. The two sides have grasped the opportunities and reached a great number of pragmatic cooperative projects. These projects are playing an active role in promoting common development and in bringing tangible benefits to the peoples of the two sides. We can see the effects in the following three aspects:

The trade is continuing to grow rapidly. China has become the second largest trading partner of Latin American and Caribbean countries, while the Latin American and Caribbean region is also one of regions with fastest growth of exports to China. In 2000,the trade volume between the two sides exceeded US$ 10 billion,hitting US$ 12.6 billion; the volume exceeded US$ 100 billion in 2007; it surpassed US$ 200 billion in 2011, hitting a record high of US$ 241.5 billion. In the first half of 2012, the trade volume of the two sides hit US$ 124.8 billion, up 17.5%. It is expected that in the next five years, the trade volume between the two sides will exceed US$ 400 billion. The trade between the two sides is relatively balanced, with the trade structure getting more optimized. China’s exports to Latin America and the Caribbean are mostly mechanical and electrical products and high-tech products, while its imports from this region are mostly minerals for energy use and agricultural products. China hopes and is ready to import more high value-added products from Latin American and Caribbean countries. China has signed and implemented free trade agreements with Chile, Peru and Costa Rica, and reached an agreement with Colombia on a joint feasibility study in launching a bilateral free trade agreement.

The two-way investment is vibrant. In recent years,expanding mutual investment has become the consensus of the governments and entrepreneurs of China and Latin America and the Caribbean. The Chinese government proactively encourages and supports competitive and reputable enterprises to invest in this region. As a result, Chinese enterprises are expanding the investment scale and widening the scope for investment in Latin America and the Caribbean. According to statistics released by China’s Ministry of Commerce, by December 2011, the nonfinancial direct investment by China in Latin America and the Caribbean totaled US$ 54 billion, involving the fields of energy,resources, agriculture, manufacturing and processing, etc. In the meantime, the investment in China by Latin American and Caribbean countries is also growing. By the end of 2011, the number of investment projects in China by Latin American and Caribbean countries totaled 27,875, with the cumulative actual investment amounting to US$ 153.3 billion, accounting for 13.1% of the global cumulative actual investment in China.

The financial cooperation exhibits good momentum. The relevant financial institutions of China have stepped up efforts to provide financing support for the economic and trade cooperation between China and Latin America and the Caribbean, and supported key projects in infrastructure, energy,mining, agriculture and social development for Latin American and Caribbean countries. The People’s Bank of China, China’s central bank, signed a 70 billion yuan (or 38 billion pesos) bilateral currency swap agreement with the Central Bank of Argentina and a 190 billion yuan (or R$ 60 billion) bilateral currency swap agreement with the Central Bank of Brazil. The two sides also stepped up consultation and exchanges on macroeconomic situation and economic and financial policies, and supported commercial banks to establish bank branches in each other’s countries. In June 2012, when visiting Latin America, Premier Wen Jiabao declared that China will initiate a cooperation fund with the first tranche of US$ 5 billion between the two sides, and China will provide a special loan of US$ 10 billion to facilitate the cooperation in infrastructure development, creating favorable conditions for expanding the economic and trade cooperation between the two sides.

There is an increasing desire and need for both sides to strengthen people-to-people exchanges on state governance, development mode, and dialogue between civilizations.

Third, cultural and people-to-people exchanges have deepened while China and Latin America and the Caribbean actively explore their development paths. Both the Chinese and Latin American and Caribbean civilizations are open and inclusive. The two sides have a time-honored history of cultural and people-to-people exchanges.

After the outbreak of the international financial crisis,the international community has a deep reflection over the development mode. The development of China has aroused increasing attention of Latin American and Caribbean countries,while the development experiences of Latin American and Caribbean countries are also worth studying and drawing upon by China. There is an increasing desire and need for both sides to strengthen people-to-people exchanges on state governance,development mode, and dialogue between civilizations, which has become the impetus to drive the development of China-Latin America and the Caribbean relations.

China has signed cultural agreements with 19 Latin American and Caribbean countries, set up 27 Confucius Institutes and nine Confucius Classes in 12 Latin American and Caribbean countries, and supported setting up Chinese Cultural Centers in this region. China decided to offer 5,000 scholarships to Latin American and Caribbean countries in the next five years,and proposed the holding of a China-Latin America and the Caribbean young political leaders’forum to provide more opportunities for youth exchange between the two sides.

China announced to list the 21 Latin American and Caribbean countries which have diplomatic ties with China as outbound travel destination countries for Chinese citizens. China has proposed the mechanism for the promotion of tourism, supported Chinese airlines to open up more direct flights connecting China and the Latin American and Caribbean region. CCTV set up a regional reporting center in Sao Paulo, Brazil, and Xinhua News Agency, People’s Daily and other national media have branches in the region. Ten major news media from Brazil, Cuba, Peru,Chile, Mexico and Colombia have resident correspondents in Beijing. China-Latin America and Caribbean Youth Festival,China-Latin America and Caribbean Legal Cooperation Forum, China-Latin America and Caribbean People-to-People Friendship Forum, China-Latin America and Caribbean Think-Tank Forum and other civil exchange mechanisms have been established, providing new platforms for promoting the friendship and cooperation between China and Latin America and the Caribbean.

China-Latin America scientific and technological exchange has been deepened. China and Brazil jointly developed and successfully launched three earth resources satellites. China developed and launched a communications satellite for Venezuela, and signed a contract with Bolivia to develop and launch a communications satellite. China will also launch a remote sensing satellite for Venezuela soon. China proposes establishing a scientific and technological innovation forum between the two sides for stronger cooperation in space and aviation, new energy, resources,environment, ocean and polar science research.

In general, despite the facts that China and Latin America and the Caribbean are separated by vast oceans, which requires more mutual understanding and contacts, and there is certain competition and frictions in the economic and trade area, which requires proper settlement through equal dialogue and friendly consultation, China and Latin America and the Caribbean enjoy mutual trust politically and mutual reliance strategically, accelerate integration economically and deepen cultural exchanges. It has become the trend in the development of their relations, and will certainly continue to grow rapidly along the way of friendly cooperation.

III.How to deepen relations between China and Latin American and Caribbean countries?

The Chinese Government made public its first policy paper on Latin America and the Caribbean in 2008. The document stressed that China views its relations with the region from a strategic height and seeks to build and develop a comprehensive and cooperative partnership featuring equality, mutual benefit and common development with countries in the region. It was the third time for China to issue a policy paper on a region following the release of such documents on the EU and Africa.It showed that China gives top priority and is strategically committed to developing relations with Latin American and Caribbean countries. During his trip to the region in June 2012,Premier Wen Jiabao put forward a series of important initiatives and measures on deepening ties. His proposals, which received a positive response from state leaders and people from all walks of life in Latin American and Caribbean countries, charted the course for the development of China’s relations with these countries at a higher level.

No matter how the international situation changes, China and Latin American and Caribbean countries should make concrete efforts to put into practice the consensus reached by their leaders in accordance with the principles of equality,mutual benefit and common development. They should focus on the following areas in a bid to promote the sustained growth of their comprehensive and cooperative partnership.

First, they should further deepen political trust based on mutual respect and confidence. As rapidly emerging forces in the international arena, China and Latin American and Caribbean countries should continue to value and advance their relations from strategic and long-term perspectives. They should respect each other, treat each other as equals and keep expanding consensus. They should continue to respect and support each other on issues involving their core interests and major concerns in the spirit of protecting their own interests and the shared interests of developing countries more effectively. They should strengthen high-level exchanges as well as exchanges at various other levels while improving existing dialogue and consultation mechanisms. They should bring into full play the pioneering role of China’s strategic partnerships with countries including Brazil,Mexico, Argentina, Venezuela, Peru and Chile to add substance to the comprehensive and cooperative partnership between China and Latin American and Caribbean countries. China should cement its bonds with regional organizations in Latin America and the Caribbean. They should engage in in-depth consultation on the establishment of a China-Latin American and Caribbean cooperation forum and the promotion of overall cooperation as part of their efforts to build a higher platform for upgrading their relations. China and Latin American and Caribbean countries should continue to use international organizations and multilateral mechanisms such as the UN, G20, APEC and BRICS to conduct closer strategic consultation and cooperation on major regional and global issues with the purpose of enhancing the global influence of their relations and jointly contributing to regional and global peace and development.

The adjustment of economic development strategies has provided more room and more new areas for China and Latin American and Caribbean countries to expand cooperation.

Second, they should further promote common development based on reciprocity, mutual benefit and win-win cooperation. At present, China and Latin American and Caribbean countries are all stepping up efforts to adjust their economic development strategies. As it implements the 12th Five-Year Plan on National Economic and Social Development (2011-2015), China is determined to accelerate the shift of its economic development model and push for the transition to a new model of economic growth fueled by consumption, investment and export in a balanced way. Many countries in Latin America and the Caribbean such as Brazil,Argentina, Chile, Cuba and Venezuela are also devising and implementing medium- and long-term development strategies aimed at optimizing economic structures, fostering the growth of emerging industries of strategic importance and strengthening infrastructure construction. The adjustment of economic development strategies has provided more room and more new areas for China and Latin American and Caribbean countries to expand cooperation. The two sides should make the most of their respective advantages, try to coordinate their development strategies and industries, tap new potential for cooperation and create more success stories. They should focus on boosting cooperation in areas such as energy, resources, infrastructure,agriculture, finance and scientific and technological innovation to improve the quality and raise the level of mutually beneficial cooperation. The countries should advance steadily toward the establishment of a free trade area, redouble efforts to optimize trade structures, jointly oppose trade protectionism, deal with trade frictions in a proper way and realize the long-term and sustainable development of their cooperative relations.

Third, they should further expand people-to-people and cultural exchanges based on the principles of learning from each other, seeking common progress and living together in harmony.Economic globalization and the wide application of information technology in society have paved the way for China and Latin American and Caribbean countries to transcend barriers posed by regional, cultural and lingual differences. The countries should continue to carry out friendly exchanges between all sectors of society including legislatures, political parties, news media, academic institutes, NGOs and cultural and sports groups. They should enhance dialogue and communication on governance concepts and domestic and foreign policies, bolster mutual understanding and further consolidate the social basis for the development of their relations. They should increase experience sharing in fields such as public health, human resources, social security, poverty alleviation and disaster relief to broaden the areas of cooperation for the benefit of their people.They should garner more public support for the deepening of their relations by making full use of their abundant cultural and tourism resources and facilitating cross-border travels by their citizens. They should create more opportunities for young people to communicate with, learn from and make friends with each other by holding the China-Latin America and the Caribbean young political leaders’forum and sending more students to each other’s countries to ensure their friendship is passed on from generation to generation.

Fourth, they should further strengthen collaboration in the Asia-Pacific region as they explore new frontiers of cooperation innovatively in keeping with the times. As important members of the greater Asia-Pacific community situated on both sides of the Pacific, China and Latin American and Caribbean countries do not have historical disputes or geopolitical conflicts in the region. They share extensive common interests in promoting the liberalization and facilitation of regional trade and investment,deepening regional economic integration and strengthening economic and technological cooperation. While building on ongoing efforts, they should intensify mutually beneficial collaboration in the Asia-Pacific region to make cooperation in Asia-Pacific affairs a new highlight of their relations. Within the framework of APEC and the Forum for East Asia-Latin America Cooperation, they should beef up practical cooperation in areas such as trade, investment, education, science, technology,culture and tourism. While giving impetus to their own development, regional cooperation can enable them to play a constructive role in promoting peace, stability, development and prosperity in Asia Pacific.

China and Latin American and Caribbean countries face unprecedented historic opportunities to usher in a bright future for their comprehensive and cooperative partnership featuring equality, mutual benefit and common development.As good friends that trust and respect each other and good partners devoted to win-win cooperation with complementary advantages, they will work in concert for greater progress in their relations in the second decade of the 21st century. They will deliver more benefits to their people and make greater contributions to regional and global peace, stability, development and prosperity.